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Tuesday, August 26, 2014

Posnanski: Money money money

 

You probably know that one of Bud Selig’s big objectives as commissioner of baseball was to even the playing field – that is, to give the small-market teams a chance to contend… Funny thing: Here at the end of his tenure, baseball is closer to Selig’s nirvana than perhaps ever before. As Brian McPherson writes in the Providence Journal, the correlation between money spent and winning is at its lowest point in a long, long time. McPherson writes that the correlation right now between wins and money is actually smaller than the correlation between wins and alphabetical order.

Why is this a funny thing?

Because, I believe the reason for whatever actual effect we are seeing is pretty directly tied to the steroid years that Selig has been running away from for more than a decade… I have a theory – one that directly relates to my belief that many baseball teams are doing something that is monumentally stupid. I’m referring to the huge, long-term deals that they are giving players – deals that last until the players are in their mid-to-late 30s, and sometimes even carries them into their 40s. These contracts are a death trap, a suicide rap, and while there are exceptions to every rule, there are never more than a few exceptions…  in the late 1990s and early 2000s… we suddenly started seeing 35-year olds performing at very high levels… My guess is that this seemingly reasonable conclusion that baseball players had started to beat the aging process was, in fact, quite unreasonable and it is probably the biggest factor in these massive, sprawling and utterly doomed long-term contracts… Baseball owners’ and GM’s madness for big money contracts to aging players has, in its own way, evened the game more than anything else Selig or any other commissioner has done.

The District Attorney Posted: August 26, 2014 at 03:15 PM | 26 comment(s) Login to Bookmark
  Tags: bud selig, economics, joe posnanski

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   1. kthejoker Posted: August 26, 2014 at 04:16 PM (#4779499)
If this is truly coming to pass, surely the players will rectify this by revising the CBA to get players out into the free agent market sooner. They're certainly not going to sit idly by and watch teams get millions of dollars of surplus value from the Mike Trouts of the world and then essentially collude/welch on making sure Trout gets paid on the backend.

Or, since Mike Trout will get his $300 million probably regardless, the Prince Fielders and Brian McCanns of the world.
   2. Dale Sams Posted: August 26, 2014 at 04:22 PM (#4779504)
And the Red Sox?
   3. BDC Posted: August 26, 2014 at 04:59 PM (#4779536)
in the late 1990s and early 2000s… we suddenly started seeing 35-year olds performing at very high levels


Has this been studied? Or is it an assertion based on noticing an old guy or two play well? Open question, honestly; it's just expressed so uncritically.
   4. Dale Sams Posted: August 26, 2014 at 05:32 PM (#4779555)
Exactly what teams have been crippled by these suicide contracts? Rockies I guess back in the day maybe...who else?
   5. Pat Rapper's Delight Posted: August 26, 2014 at 06:06 PM (#4779570)
I didn't know Queensryche had covered Money, but after playing trumpet with The O'Jays on five shows in the last couple of years, I've got to stick with the originals. Even though the two originals are in their early 70's, they still put on a hell of a show dancing and singing all night long.... or well, for the 75 minutes that their show runs. Lots of good times on those gigs....
   6. Commissioner Bud Black Beltre Hillman Posted: August 26, 2014 at 06:14 PM (#4779576)
I thought the current, post-steroids conventional wisdom was to sign players through their age 36 seasons but no further, with some exceptions. IIRC there was an article posted about that here a year or so ago (though my recollection is that said article was by Pos, so who knows).
   7. PreservedFish Posted: August 26, 2014 at 06:19 PM (#4779580)
Exactly what teams have been crippled by these suicide contracts? Rockies I guess back in the day maybe...who else?


Teams don't need to be crippled for Pos to be correct. He could also be right if it's mostly just stupid teams giving out the monster contracts.

I think "crippled" is the wrong word, anyway. A bad monster contract doesn't really need to ruin a team, just be bothersome. I don't think Ryan Howard's contract is murdering the Phillies, but it hurts.
   8. PreservedFish Posted: August 26, 2014 at 06:28 PM (#4779587)
What's really happening IMO is that these monster contracts are, in the aggregate, such terrible value that you're talking about hundreds of millions of wasted dollars that belong almost exclusively to the wealthier teams. So you have two groups of teams, the haves and have nots, and what separates them is the ability to pay $40 million on unproductive payers. But otherwise it's an even playing field.

This simplified to an absurd degree, of course.
   9. AROM Posted: August 26, 2014 at 06:54 PM (#4779603)
As bad as the Howard deal is, they are spending about 125 million on the rest of the team. You should be able to field a decent team for that.

I don't know about the aging pattern thing either. Most good players are useless at 35, some continue past that. The limit for a superstar is early 40's, as always has been. From Wagner and Cobb to Williams, Mays, and Aaron, to Ripken, Bonds, and Jeter.
   10. Pasta-diving Jeter (jmac66) Posted: August 26, 2014 at 06:58 PM (#4779606)
I don't think Ryan Howard's contract is murdering the Phillies, but it hurts.

It's not Howard's CONTRACT that's murdering the Phillies, it's the fact that he has a OPS+ of 92. The problem with monster contracts is that teams feel compelled to keep playing the guy, even if he's horseshit
   11. Steve Balboni's Personal Trainer Posted: August 26, 2014 at 07:10 PM (#4779614)
According to Cot's Baseball Contracts, there have been 54 contracts in baseball history with a total value of $100 million or greater. Obviously, they are all quite recent (only one, Kevin Brown, started before the year 2000).

Looking at the list, there are damned few you'd say were good values, at least with the benefit of hindsight. 14 of them are pitchers (two fo the 14 are the same guy - CC Sabathia). Out of these 55 contracts,, it strikes me that the one that probably is worst combination of financial commitment, lack of commensurate performance, and the size of the team's market is the Joe Mauer contract.
   12. Infinite Joost (Voxter) Posted: August 26, 2014 at 08:53 PM (#4779656)
The problem with monster contracts is that teams feel compelled to keep playing the guy


This. As long as Howard's on the team, the Phillies are going to play him, and they're not going to put work into upgrading the position. Very few teams are willing to cut bait on dead contracts, and there are examples littered around baseball of mediocre players being paid like the stars they once were, marooned out there at first base until their contract ends.
   13. JRVJ Posted: August 26, 2014 at 09:06 PM (#4779660)
IMO, the Phillies are not a very good example of this, because they're a team where WAY too many things went badly.

The Phillies have received relatively decent production on the big contracts to Hamels, Lee (until this year), Utley, Rollins and even Papelbon (who is overpaid, but isn't really the problem with the Phillies).


They've received good production from Marlon Byrd, who was a cheapish FA pick--up this year. But not so good production from A.J. Burnett or Mike Adams.

And they've been burned by YOUNG players like Domonic Brown and to a lesser degree, Ben Revere.

And they were burned by the last year of Halladay's deal, this year's Cliff Lee, the Ryan Howard contract (yes, it's terrible) and the fact that they traded away Shane Victorino and Hunter Pence and got nothing of note back........

   14. Crispix reaches boiling point with lackluster play Posted: August 26, 2014 at 09:33 PM (#4779674)
Right, all the Phillies old overpaid guys have been good, except Howard. If all the Yankees' old overpaid guys had been good over the last 5 years they might have won 5 World Series. Because they also have the occasional young and/or underpaid guy, which the Phillies do not have.
   15. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: August 26, 2014 at 09:55 PM (#4779695)
IMO, the Phillies are not a very good example of this, because they're a team where WAY too many things went badly.


They're a great example of what can happen when you depend heavily on (1) pitchers, (2) old guys, or (3) old pitchers.

If all the Yankees' old overpaid guys had been good over the last 5 years they might have won 5 World Series.


Nah. Due to the very random nature of baseball's playoffs, I find myself torn between wanting to hate expanded playoffs (because they make the "champion" determined even more by random luck, which seriously dilutes the significance of the longest regular season in sports) and wanting to love them (because they make it impossible for the Yankees to reliably win championships).
   16. smileyy Posted: August 26, 2014 at 11:51 PM (#4779738)
I love Joe Mauer, but to sign a guy who's primary skill is to hit like that *while playing catcher* and then move him off of catcher because you can't risk the health of a guy with a contract like that...

I mean, that's not exactly how it played out, but it kinda is. There was talk of Mauer not catching anymore before the contract was signed.
   17. AROM Posted: August 26, 2014 at 11:54 PM (#4779741)
Expanded playoffs would not have made anything tougher for the 96-2009 Yankees. They would have had to settle the division with the 2005 Red Sox instead of being awarded a tie breaker. But they would have faced Boston for a play in game in 2008 instead of missing the playoffs.

Most of those years they had the best record in the league, so their first round opponents would have already spent their top starter.

Yankees aren't reliably winning championships anymore because Jeter can't drive the ball, and Mariano and the rest of the core are retired.
   18. bookbook Posted: August 28, 2014 at 09:07 AM (#4780677)
+It's not Howard's CONTRACT that's murdering the Phillies, it's the fact that he has a OPS+ of 92. The problem with monster contracts is that teams feel compelled to keep playing the guy, even if he's horseshit+

The M's would kill for a 1b/DH who could manage a 92 OPS+
   19. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: August 28, 2014 at 11:08 AM (#4780774)
AROM: By expanded playoffs I meant beginning in 1995. The result of a playoff series in baseball is functionally random; so the more series there are, the more random the result of a season becomes.

The M's would kill for a 1b/DH who could manage a 92 OPS+


Yeah? Then why did they, along with everyone else, politely decline when Amaro was offering Howard around for free (picking up essentially the entire contract) to any team that wanted him, as was commonly reported?
   20. Barry`s_Lazy_Boy Posted: August 28, 2014 at 11:44 AM (#4780812)
The M's would kill for a 1b/DH who could manage a 92 OPS+

They can probably have Howard for a C- prospect.
   21. Ron J2 Posted: August 28, 2014 at 11:51 AM (#4780822)
#20 More like the Phillies would be willing to give a prospect if somebody would take the contract.
   22. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: August 28, 2014 at 11:52 AM (#4780823)
I'm not sure if the Phillies have two prospects any team would take on Howard's contract to get.
   23. Crispix reaches boiling point with lackluster play Posted: August 28, 2014 at 11:58 AM (#4780827)
They have that guy who was pitching at LSU a couple months ago, and that injured third base guy.
   24. BDC Posted: August 28, 2014 at 03:56 PM (#4781031)
I began to look at that issue I raised in #3, whether "in the late 1990s and early 2000s… we suddenly started seeing 35-year olds performing at very high levels," and not only is there really no such effect, it's of almost monotonous lack of interest to watch the variance of aging players doing well across baseball history, as AROM suggests in #9. The highest concentration I've found of players 35 or older playing at a 4-WAR level (per 162 games, adjusting for the number of total teams) was in 1925. There was indeed a slight peak in such players 1999-2000, but it was not as high as an earlier peak 1992-94, and only about as high as a still earlier one c1970. And in any case, we're talking at most 4 or 5 players at such a level in any given year. There are tiny fluctuations in this over the years, but no trend that I can see.

I chose 4 WAR arbitrarily as a number that might merit an expensive contract. "Very high level" might mean different things to different people, of course, and some would see 4 WAR as not all that high, others as pretty darn high for a 35-year-old (which it certainly is). It's entirely possible that GMs around 1999-2000 perceived that 35 was the new 25 and started flinging outrageous money at old guys. But there was no reason to do so, as levels of such players receded even before steroids testing (and by receded I mean from around 5 per year to around 3 per year).

I don't even think it's worth studying further. There is just no widespread phenomenon of old guys suddenly finding a fountain of youth in 1999. There is, I believe, widespread extrapolation from the single data point of Barry Bonds, which because of his salience seems to indicate that every old guy was now a superstar. But it didn't happen.
   25. PreservedFish Posted: August 28, 2014 at 04:27 PM (#4781071)
There is, I believe, widespread extrapolation from the single data point of Barry Bonds, which because of his salience seems to indicate that every old guy was now a superstar. But it didn't happen.


I don't think it's the single data point. You also had guys like Jim Edmonds, Chuck Finley and Luis Gonzalez that hit their peak in their 30s, and looked good doing it. Palmeiro.

But Poz's theory is too simple, anyway. I remember getting really wowed by the size of the contracts that FAs were signing around 2000 - Manny Ramirez, ARod, Mussina, Jeter, Brown, Hampton. This was before Bonds became Mr. Fathead 1.300 OPS. I don't think that GMs were inspired by whoever the greybeards

People always underestimate how weird the free agent market is. I don't know enough about econ to analyze it properly. But each player is unique, demand vastly outweighs supply, and it only takes one idiot to write a contract that has the rest of the game gaping in astonishment. I think the mega-contracts of today are far better explained by the economics of the game than they are any observations GMs have made about player aging. And several of the highest paid players were said to have been essentially signed by owners going against the objections of their GMs.
   26. BDC Posted: August 28, 2014 at 04:52 PM (#4781105)
#24 is about position players only, I should add.

I think Fish captures the irrationality of markets quite well. The market for high-end baseball FAs doesn't have enough buyers & sellers in it for big individual irrationalities to wash out.

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